The opposition politicians who proposed scrapping the taxes had argeued that
expanding mobile phone usage into rural areas would be affected by the tax.

Mr Oduman MP said, "The issue of losing revenue doesn't arise because the
government will be charging more taxes on airtime used by mobile phone users,
hence widening the tax base."

Phone dealers have long argued for the tax to be scrapped, citing increased
levels of grey imports and smuggling from the neighbouring countries. The
concerns were heightened with neighbouring Kenya lowered its taxes on mobile
phone handsets earlier this year.

The GSM Association has long called for a lowering of taxes on mobile phone
handsets and airtime, arguing that the lower costs boosts the user base and
hence leads to a net increase in revenue for governments.

A recent report from the GSMA said that mobile subscribers across East Africa
are taxed at some of the highest levels world-wide. Kenya, Uganda and Tanzania
impose mobile-specific taxes which when added to VAT can result in their
respective consumers facing taxes as high as 30% in Uganda and Tanzania, and 27%
in Kenya, considerably the highest rates in Africa (and the among the highest
across the world as a whole).